Marriage of Krantz ( 2021 )

05/11/2021
DA 20-0363
Case Number: DA 20-0363
IN THE SUPREME COURT OF THE STATE OF MONTANA
2021 MT 119N
IN RE THE MARRIAGE OF:
DIANE KRANTZ,
Petitioner and Appellee,
and
KEITH KRANTZ,
Respondent and Appellant.
APPEAL FROM: District Court of the Twentieth Judicial District,
In and For the County of Lake, Cause No. DR-17-76
Honorable James A. Manley, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Tiffany A. Nunnally, Five Valleys Law, P.L.L.C., Missoula, Montana
For Appellee:
Hilly McGahan, Attorney at Law, Missoula, Montana
Submitted on Briefs: January 13, 2021
Decided: May 11, 2021
Filed:
cir-641.—if
__________________________________________
Clerk
Justice Dirk Sandefur delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating
Rules, we decide this case by memorandum opinion. It shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition will be included in our
quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.
¶2 Appellant Keith Krantz (Keith) appeals the June 2020 judgment of the Montana
Twentieth Judicial District Court, Lake County, modifying his spousal maintenance
obligation to Appellee Diane Krantz (Diane). We affirm.
¶3 In July 2019, after two years of contested litigation, the District Court issued a final
decree dissolving the parties’ 29-year marriage, equitably apportioning their marital assets
and debts, and requiring Keith to make specified spousal maintenance payments to Diane.
At the time of dissolution, the parties were both in their 60’s with significant marital debt.
For most of the marriage, they primarily resided on Keith’s family farm, which is owned
by the Krantz Family Limited Partnership in which Keith is a limited partner. Since early
in the marriage and at the time of dissolution, Keith was employed full-time by Montana
Rail Link (MRL) as a welding foreman and his wages were the primary source of the
marital income. His annual MRL income at the time of dissolution was approximately
$63,000. During the marriage, Diane primarily worked and contributed in an unpaid
2
capacity as a homemaker and on the farm.1 Based on her part-time employment as a school
bus driver, her annual income at the time of dissolution was approximately $16,000.
¶4 The final decree awarded Keith 100% of his limited partnership interest in the
family farm and 100% of his employment-related 401k retirement account. It awarded
Diane 100% of her school district public employees’ retirement interest, a specified share
of the divisible portion of Keith’s federal Railroad Retirement Act (RRA) benefits,2 and
spousal maintenance in the amount of $700 per month until Keith retires from MRL. The
maintenance award included a phase-out provision that, upon Keith’s MRL retirement,
would reduce his monthly maintenance obligation by the combined monthly amount of
Diane’s court-apportioned share of his divisible RRA benefits and her separate “divorced
spousal annuity” under the RRA.3 As part of the marital estate apportionment under
§ 40-4-202, MCA, the decree ordered Keith to pay Diane a separate marital estate
equalization sum, immediately payable by lump sum or in monthly installments until
satisfied.
1
The parties were also the primary providers during their marriage for Diane’s special-needs
grandson from a prior relationship. The grandson was 14 years old when they separated in 2017
and Diane continued to provide for him thereafter.
2
See 45 U.S.C. § 231, et seq.
3
While not entirely clear from the final decree, the briefing on appeal, and the underlying record,
the RRA apparently independently entitled Diane to a “divorced spousal annuity,” separate and
apart from any share of the divisible portion of Keith’s federal railroad retirement benefits
equitably apportioned to her by the court under § 40-4-202, MCA.
3
¶5 On August 19, 2019, Keith filed a motion for post-judgment relief to correct an
asserted error in the amount of marital debt apportioned to him and for corresponding
adjustment of his marital estate equalization payment obligation. On September 23, 2019,
while Keith’s motion was still pending, Diane filed a separate contempt/show cause motion
for enforcement of the decree based on alleged delinquencies in his monthly maintenance
and marital estate equalization obligations, and the negative effect of her entitlement to
maintenance and the marital estate equalization distribution on her contemplated eligibility
for aid under the Supplemental Nutrition Assistance Program (SNAP) and Temporary
Assistance for Needy Children (TANF) programs. On January 27, 2020, without reference
to Diane’s motion, the District Court issued an amended final decree correcting the asserted
error in Keith’s marital estate apportionment and correspondingly reducing his marital
estate equalization payment obligation from $67,515.78 to $61,956. The amended decree
did not alter his previously imposed monthly maintenance obligation.
¶6 On February 21, 2020, following Diane’s filing of a notice of issue and an updated
payment delinquency notice, the District Court set a hearing for April 15, 2020, on her
pending contempt/show cause motion regarding Keith’s delinquent monthly maintenance
and equalization payment obligations. In March 2020, Keith retired from MRL earlier than
anticipated. As he acknowledges on appeal, his early retirement caused Diane’s RRA
divorced spousal annuity to be only $757 a month, rather than $1,122 per month as
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anticipated had he not retired early.4 On April 20, 2020, days before the oft-rescheduled
hearing on Diane’s contempt/show cause motion, Keith filed for federal Chapter 13
bankruptcy debt reorganization and protection from his court-ordered maintenance and
marital estate equalization debts, inter alia. Pursuant to 11 U.S.C. § 362, and subject only
to certain narrow exceptions, the bankruptcy filing automatically stayed all debt
enforcement or collection actions against him.
¶7 In response, Diane filed a motion seeking suspension or elimination of the
maintenance phase-out provision in the decree in this matter, thereby extending and
continuing Keith’s monthly maintenance obligation to offset the asserted shortfall in her
income caused by the combination of his unanticipated early retirement, the bankruptcy
stay, and his ongoing delinquencies in his court-ordered maintenance and martial estate
equalization obligations. In June 2020, the District Court granted Diane’s motion pursuant
to § 40-4-208(2)(b)(i), MCA, and 11 U.S.C. § 362(b)(2)(A)(ii) (automatic stay exemption
for modification of domestic support obligations). Pending “further order,” the court
ordered that Keith’s original $700 per month maintenance obligation would continue even
after his early MRL retirement and Diane’s resulting receipt of monthly payments under
her RRA “divorced spousal annuity and her portion of [his] monthly retirement benefits.”5
4
Keith acknowledges the negative effect of his early retirement on Diane’s anticipated RRA
divorced spousal annuity, but asserts that it is of no consequence because the final decree did not
expressly specify a particular retirement date.
5
The court further ordered Keith to make all maintenance payments by direct deposit into Diane’s
bank account and that the maintenance obligation “shall not terminate upon the death of either
party[,] nor shall it terminate upon the remarriage of Diane.”
5
The revision essentially suspended the previously ordered spousal maintenance phase-out
provision pending further order of the court. Keith timely appeals.
¶8 District courts may modify a previously imposed maintenance obligation only
“upon a showing of changed circumstances so substantial and continuing as to make the
terms unconscionable.” Section 40-4-208(2)(b)(i), MCA; In re Marriage of Schmieding,
2003 MT 246, ¶¶ 35-36, 317 Mont. 320, 77 P.3d 216. As used in § 40-4-208(2)(b)(i),
MCA, the term “unconscionable” is undefined and we have previously held that courts
must thus interpret and apply it upon “scrutiny of the underlying facts” of each particular
case. In re Marriage of Brown, 283 Mont. 269, 272, 940 P.2d 122, 123 (1997) (citation
omitted).6 In context of the referenced statutory standard as applicable here, at least
encompassed within the statutory term “unconscionable” are circumstances where one
spouse has unexpectedly interrupted previously ordered payments to a spouse who is
otherwise “unable to be self-supporting through appropriate employment[,] or is the
custodian of a child whose condition or circumstances make it [in]appropriate” to require
the subject spouse “to seek employment outside the home,” thereby denying that spouse
“sufficient [resources] to provide for [his or her] reasonable needs” as previously ordered.
See §§ 40-4-203(1)(a)-(b), and -208(2)(b)(i), MCA; McNeff v. McNeff, 207 Mont. 297,
6
Outside of the contract law context, the pertinent plain meaning of the term “unconscionable” is
an “affront[] [to] the sense of justice . . . or reasonableness . . . [s]hockingly unjust or unfair.”
Unconscionable, Black’s Law Dictionary (11th ed. 2019). See also Merriam-Webster,
https://www.merriam-webster.com/dictionary/unconscionable (Accessed Apr. 26, 2021)
(defining unconscionable as “shockingly unfair or unjust : excessive, unreasonable”).
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300-01, 673 P.2d 473, 475-76 (1983) (applying § 40-4-208(2)(b) unconscionable standard
in reference to spousal maintenance criteria). See also Mooney v. Brennan, 257 Mont. 197,
203, 848 P.2d 1020, 1024 (1993) (similarly applying § 40-4-208(2)(b) unconscionable
standard in reference to child support criteria). Section 40-4-208(2)(b)(i), MCA, generally
requires courts to make distinct findings of fact regarding the predicate “changed
circumstances and [resulting] unconscionability.” Schmieding, ¶¶ 35-36 (internal citations
omitted). The requisite findings of fact need not be phrased in the express language of
§ 40-4-208(2)(b)(i), MCA, but must be at least minimally sufficient for assessment of
whether the court adequately considered the requisite statutory criteria. Schmieding,
¶¶ 39-40 (internal citations omitted).
¶9 Here, the analysis under § 40-4-208(2)(b), MCA, necessarily begins with the
previously adjudicated circumstances upon which the court ordered maintenance in the
first place—Diane was in her 60’s, had no prior earning history, skills, or experience other
than as a homemaker, farm worker, and part-time school bus driver earning $16,000 per
year, and would continue as the primary provider for her special-needs grandson. Keith
has not asserted, much less demonstrated, that any of those circumstances have changed.
Moreover, as noted by the District Court, the final decree provided for Keith to timely
make monthly equalization payments in addition to his specified monthly maintenance
obligation. Manifestly implicit in the original decree and the subsequent maintenance
modification order is the court’s recognition that Diane critically depends on Keith’s timely
payment of his previously ordered maintenance and marital estate equalization obligations
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for her support and obligations. See §§ 40-4-202(1) and -203(1)(a)-(b), MCA (in re
relationship between a spouse’s apportioned marital estate share and need for
maintenance).
¶10 From that baseline, the court’s findings reflect that the automatic stay prompted by
Keith’s bankruptcy filing has deprived Diane of her right and ability to collect delinquent
and future equalization payments from him during the indefinite term of the bankruptcy.
Further, Keith does not dispute the asserted delinquencies in his maintenance and marital
estate equalization obligations on appeal, and acknowledges the negative effect of his early
retirement on Diane’s RRA annuity.
¶11 As to the resulting unconscionability of the original maintenance award, the District
Court found that, regardless of a factual dispute as to the extent to which Keith’s income
has increased since entry of the original decree, Diane is now “in an increasingly dire
financial situation.” We agree that the court could and should have conducted an
evidentiary hearing and made additional findings supporting that general finding.
However, under the particular circumstances of this case, the court’s ultimate finding of
fact regarding Diane’s dire financial condition is manifestly supported by record facts not
subject to genuine material dispute—the pertinent facts previously adjudicated in the
original decree, the effect of the bankruptcy stay, the acknowledged negative effect of
Keith’s early retirement, and the undisputed delinquencies in his maintenance and marital
estate equalization payment obligations. Under these circumstances, the District Court’s
ultimate finding of fact that “[t]he circumstances in this matter have so substantially
8
changed that the [maintenance] phase-out provision . . . is no longer conscionable” is not
clearly erroneous, regardless of the fact that Diane is now receiving her RRA “divorced
spousal annuity” ($757 per month) and the existence of a question of fact as to the extent
of Keith’s income increase.
¶12 Keith asserts that the District Court separately abused its discretion in ordering that
the modified maintenance obligation “shall not terminate upon the death of either party[,]
nor shall it terminate upon the remarriage of Diane.” We would agree that this provision
is seemingly unsupported and unexplained on this record, and would thus be problematic
if standing alone. However, the District Court expressly ordered that the maintenance
modification “should continue uninterrupted until further [o]rder of this [c]ourt.” While
not the model of clarity and ambiguous as to duration, the language of the order, read in
context as a whole in the light most favorable to the prevailing party, manifests that its
intended effect was to temporarily remedy an immediate inequity in a state of flux as a
result and pending resolution of Keith’s unanticipated federal bankruptcy proceeding.7
Under the unique circumstances of this case, we hold that the District Court did not
erroneously modify Keith’s monthly maintenance obligation based on a clearly erroneous
finding of fact, erroneous application or conclusion of law, or arbitrary reasoning, lacking
7
Keith further cursorily asserts, inter alia, that the District Court’s maintenance modification order
improperly impacts bankruptcy estate assets. Aside from the lack of legal authority and analysis
supporting that assertion, its merit is in any event a matter for the federal bankruptcy court to
consider beyond the purview of this Court.
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conscientious judgment or exceeding the bounds of reason, resulting in substantial
injustice.
¶13 We decide this case by memorandum opinion pursuant to Section I, Paragraph 3(c)
of our Internal Operating Rules. It shall not be cited and does not serve as precedent. The
case title, cause number, and disposition will be included in our quarterly list of noncitable
cases published in the Pacific Reporter and Montana Reports. Affirmed.
/S/ DIRK M. SANDEFUR
We concur:
/S/ LAURIE McKINNON
/S/ JAMES JEREMIAH SHEA
/S/ BETH BAKER
/S/ JIM RICE
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